1. HEALTH INSURANCE PLANS

2. BACKGROUND INFO Cost is a major concern
Health care is over 15% of gross national product
Without insurance, the cost of an illness could become a financial disaster
Most people rely on employer-provided health insurance coverage.
With increased costs, employees are having to pay a higher portion of their health insurance.

3. TYPES OF PAYMENT METHODS
Private insurance
Direct payment
Government plans

4. PRIVATE INSURANCE Primarily employment-based
Can get better rates buying for a group of people
Offered by thousands of companies; Ex. Blue Cross Blue Shield
TERMS & DEFINITIONS:
Premium-monthly amount paid to an insurance company for coverage
Deductible-money a person pays before the insurance policy provides benefits (usually high deductibles mean lower premiums)

5. PRIVATE INSURANCE CONT.
Co-insurance-(cooperative insurance) plan that requires the insured to share a portion of cost (usually 10 to 30 percent)
Co-pay- flat fee paid for each service (ex. Insured must pay $20 toward a doctor visit)

6. MANAGED CARE
50 % of plans
Response to try to control health care costs
Puts health care providers in position of managing a patient’s use of health care
Types of plans: HMO, PPO, POS

7. CHARACTERISTICS OF MANAGED CARE
In-network providers—belong to plan
Out-of-network providers—do not belong to plan
Emphasizes primary & preventive care
Eliminate duplicate services
Encourage cost containment
Provide profit for both providers & insurance companies
Includes a utilization review
Primary care provider serves as a gatekeeper(must make a referral in order for a person to see a specialist)

8. HMO Health Maintenance Organization
Provides coverage only if care is delivered by a member of its group
Monthly fee or premium is paid regardless of amount of care provided
Advantage: provides ready access to health care, early detection and treatment of disease, individual usually maintains better state of health
Disadvantage: can only use HMO affiliated providers, must pay higher costs if go out of network

9. PPO Preferred Provider Organization
Sets up a network of participating providers of health care services
Usually requires a deductible and co-pay
Patient would have to pay higher out-of-pocket costs if they go out of network

10. POS
Point-of-service
Physician coordinated plan which combines HMO & PPO plans

11. DIRECT PAYMENT Patients pay for their own health care
More likely to shop around
Illness could be devastating

12. GOVERNMENT PLANS Plans funded by government agency
Medicaid, Medicare, Tricare, SCHIP

13. MEDICAID Government program for low-income & disabled people
Established in 1965 as part of Social Security Act
Jointly funded by federal and state governments, but regulated by states

14. MEDICARE Federally funded health care program
Established in 1965 by Social Security Act to provide health care to Americans 65 or older
Expanded in 1972 to include permanently disabled workers who qualify for Social Security, as well as their dependents
Converted to prospective payment system in 1983 to help control costs (DRG’s)

15. MEDICARE CONT.
THREE MAIN TYPES: Part A: covers hospital services & extended care facility, home health after hospitalization, hospice Part B: covers doctor services, outpatient services, therapy, lab, x-ray Requires individual to pay a premium. 80/20 % co-insurance Part D: helps with pharmaceutical expenses Many people opt to choose supplemental plans to cover additional costs.

16. TRICARE
Provides medical coverage for active & retired military service personnel and their dependents

17. SCHIP State Children’s Health Insurance Program
New program established in 1997
Provides matching funds to states to help expand health care to uninsured children

18. WHY ARE COSTS INCREASING?
DRUG COSTS
TECHNOLOGY
PROFESSIONAL COSTS
AGING POPULATION

19. Importance of health professionals knowing economics of health care
Professionals know how finances affect each person’s experience
Workers can make conscious and practical decisions that promote affordable, quality care for every patient.